The latest figures from the U.S. Bureau of Labor Statistics (BLS) signaled that the economy is finally regaining strength, with accelerated hiring, increased wages, and people who had dropped out from the workforce restarting their job hunts.
In January 2015, employers added 257,000 new jobs, surpassing economists’ estimates of 228,000 jobs. The biggest job gains came from the retail and construction sectors, which added 46,000 and 39,000 jobs, respectively. Healthcare employment also increased by 38,000.
Jobs Added in the Past Year
The unemployment rate increased in January 2015 from 5.6 percent to 5.7 percent. Economists point to the more than 700,000 Americans starting their search for jobs as the reason. Since not all of them found work, the number of unemployed swelled. The influx of job seekers suggests that Americans are growing more confident about their prospects. The labor participation rate in January 2015 rose to 62.9 percent from 62.7 percent in December 2014, and the employment to population ratio was 59.3 percent, up from 58.8 percent a year ago.
Average hourly wages rose 12 cents to $24.75 in January, a jump of 0.5 percent, the most since 2008. Hourly pay, over the past year, has increased by 2.2 percent after a long period of stagnation. In January, 20 states raised their minimum wages, which may have contributed to the overall pay gains. The improved job market and pay growth are causing experts to predict that the Federal Reserve will begin raising short-term interest rates by midyear.
Average Hourly Earnings of Production and Non-supervisory Employees
“Employment growth is clearly on fire, and it is beginning to put upward pressure on wage growth. The Fed can’t wait much longer in that environment, particularly not when interest rates are starting at near zero.” ~Paul Ashworth, Chief U.S. Economist at Capital Economics
Job Openings in America
Unfilled positions in the U.S. climbed in December 2014 to an almost 14-year high. There were 5.03 million job openings in December, the most since January 2001, according to the Labor Department’s Job Opening and Labor Turnover Survey (JOLTS).
The number of people hired climbed to 5.15 million in December, the most since November 2007. The hiring rate increased to 3.7 percent, from 3.6 percent in November 2014. Even with the gain, the increase in the number of unfilled openings indicates that companies are having trouble finding qualified talent.
Meanwhile, approximately 2.72 million people quit their jobs in December, the highest in four months, and a sign of confidence in the labor market. The quits rate, which shows the willingness of workers to leave their jobs, remained steady at 1.9 percent.
“The fact that you have so many new jobs coming on the market shortens the time that individuals have to spend in unemployment, between jobs.” ~Lou Crandall, Chief Economist at Wrightson ICAP LLC
Tech Jobs Account for Almost 6 Percent of Private Sector
According to a recent report released by CompTIA, the U.S. technology industry added 129,600 jobs in 2014 for a total of 6.5 million jobs. Based on these figures, the tech industry now accounts for 5.7 percent of the entire private-sector workforce. Within the industry, the IT services sector led the growth, adding 63,300 jobs between 2013 and 2014. Leading states for tech industry employment were California, Texas, New York, Florida, and Massachusetts. By rate of growth, the fastest-growing states for tech employment were Nevada, Delaware, and Tennessee.
Nearly Half of Millennials Seeking New Jobs
A new study, “Inside the Employee Mindset”, released by Aon Hewitt, reveals that 43 percent of millennials plan to actively look for a new job in 2015. According to Ray Baumruk, employee research leader at Aon Hewitt, the research shows that there is a disconnect between what millennials expect and desire from employers and what employers actually offer, and this gap is negatively impacting engagement and retention of millennials.
When asked to rank the specific areas they would like to see improved in their current workplace to increase their engagement or satisfaction, top responses included pay and benefits, career opportunities, and performance recognition.
Areas to Improve To Increase Millennial Engagement
Source: Aon Hewitt
Blizzards Bring More than Just Snow
According to Planalytics, a weather research firm for business, this winter’s blizzards could cost the country nearly $2 billion this year in lost GDP. The Polar Vortex of 2014 cost the economy $15 billion. In the first quarter of 2014, America’s economic growth was actually negative 2.1 percent. Estimates for the first quarter of this year are much more positive, with some experts projecting a GDP of over 3 percent.
The Boston Globe says that a one-day storm in Massachusetts costs the state economy about $265 million in lost business, wages, and taxes, along with the cost of snow removal. In New York, the total cost is around $700 million.
“The labor market was the last thing to recover from the Great Recession, and in the last six months it has picked up steam. The benefits for the middle class are now solidifying.” ~Bill Hampel, Chief Economist at the Credit Union National Association.